Baker Hughes' Policy to Disclose Chemical Components in Well Stimulation Fluids Designed to "Increase the Public Trust"

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One of the largest oil-field services companies in the world, Baker Hughes, has revised its long-standing policies on disclosing the contents of hydraulic fracturing fluids on FracFocus.org - a non-profit database designed to provide the public with information related to oil and gas development.

The policy states that the company believes it is “possible to disclose 100% of the chemical ingredients [used] in hydraulic fracturing fluids without compromising [its] formulations.”  Baker Hughes believes disclosing the individual chemicals used - but not the specific mixtures of compounds with trade names - will “increase the public trust” without compromising the economic value of trade secrets.  However, competitors in the drilling services industry, such as Halliburton, have yet to follow this approach.  Halliburton has publicly expressed concern that this level of disclosure will result in reverse engineering of processes already patented, though it has stated it will evaluate Baker Hughes’ policy and its impact on trade secrets.

Some states, such as California, Texas, and Pennsylvania, already require operators and drilling service companies to publicly disclose hydraulic fracturing chemicals on FracFocus.org, though these states have varying degrees of exemptions from the disclosure requirements for trade secret protection.  In some states, such as in California (see Pub. Res. Code § 3160(g)(2)), operators will report to FracFocus.org only until independent disclosure websites are created by state regulatory bodies.

Whether this disclosure policy will ultimately benefit Baker Hughes remains to be seen, as opposition to hydraulic fracturing and other forms of well stimulation activities heats up across the United States.  Nevertheless, many will see the new disclosure policy as a legitimate step toward bridging the gap between environmental interests and those in the industry seeking to develop America’s abundant hydrocarbon resources.

 

Topics:  Baker Hughes, Fracking, Oil & Gas, Public Disclosure

Published In: Energy & Utilities Updates, Environmental Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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